Sunday, August 05, 2007

Wealth is a Matter of Perspective

I was reading Boston Gal's blog and I saw this link to an article in the NY Times about Silicon Valley millionaires that don't feel rich. Wealth is all a matter of perspective. When everyone around you is poor, you feel rich in comparison. For these people, everyone around them is rich, so they feel poor, despite being among the richest people in America.

A while ago I read a study about two types of jobs about two job offers.

Job A pays $90K while all of your other co-workers are paid $80K.
Job B pays $100K while all of your other co-workers are paid $120K.

Which job would you rather have? This assumes that the work for both jobs is completely the same for you and for your co-workers. The study I read about said that most people would be happier with Job A, even though the net pay is less. I would have to agree that I would be happier with Job A. Looking at it from a broad view, Job B would be better for your bottom line. But psychologically, I would be upset at being paid less than my colleagues for doing the same work.

I think this is how the rich Silicon Valley millionaires feel - even though they're not doing exactly the same job. A lot of the wealth is based on timing and luck. Of course the Silicon Valley millionaires also feel the need to keep up with the rich Joneses which does not help their situation.